Issue 1 December 2020
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Nau mai, haere mai ki Pānui – Energy and Resource Markets. This is a quarterly update that covers relevant information for iwi and hapū with interests in the energy and resources sector, and provides opportunities to share your views directly with the Energy and Resource Markets branch.
Our role in the energy and resource markets
This update is brought to you by the Energy and Resource Markets (ERM) branch, part of the Ministry of Business, Innovation and Employment. ERM are the stewards of two regulatory systems, the energy system and the Crown-owned mineral and petroleum system. These systems are connected - we need resources to make energy and we need energy to extract resources.
Find out more about our work in the energy system here:
Energy Market regulatory system on MBIE
For information about the Crown-owned minerals and petroleum system, see here:
Working towards 2050 net-zero emissions – have your say
To keep us on track to meet New Zealand’s 2050 emissions reduction target, the government must set emissions budgets, guided by advice from The Climate Change Commission (CCC). To help us work towards meeting our target, an emissions reduction plan will set out policies and strategies to meet the emissions budgets. This includes strategies for reducing emissions in a number of key sectors.
Our branch is leading work on the Heat, Industry and Power (HIP) sector strategy, focused on reducing emissions from stationary energy combustion (for example, from process heat), fugitive emissions (for example, from geothermal fields), and from industrial processes and product use (for example, from production of steel and cement).
The HIP sector strategy will reflect current and future priorities for the HIP sector emissions reductions from 2022 to 2035. This may be an area of interest to iwi/Māori as resource owners, developers of renewable electricity and process heat projects, and energy users. Specific areas of interest may include addressing barriers to accelerate renewable energy, increasing energy efficiency and decarbonising process heat, investigating hydrogen development and use, increasing the use of bioenergy, and managing New Zealand’s minerals resources to assist in emissions reductions.
- 2050 emissions reduction target(external link) – Ministry for the Environment website
- Climate Change Commission website(external link)
- Process heat factsheet [PDF, 1.7 MB] – MBIE website
Have your say
Is the Heat, Industry or Power sector an area of interest for you? ERM is looking to hear from iwi or hapū informally, ahead of formal engagement by the CCC in February 2021 and government later in 2021. We welcome any thoughts or feedback you want to share about this area of work. To find out more contact us at energymarkets@mbie.govt.nz.
Addressing energy hardship in New Zealand
The Electricity Price Review (EPR) was an independent review commissioned by the Minister of Energy and Resources. One of the review’s key findings was that energy hardship is a pressing problem, with children over-represented in many of the affected households. The EPR made eight recommendations to address energy hardship; however they also recognised the causes are complex and extend beyond the electricity sector and the solutions require joint action.
In October 2019, the government responded to the EPR report and agreed to a work programme that progresses the majority of the recommendations.
In August 2020, the government announced it was allocating $17 million towards initiatives to reduce energy hardship and improve advocacy for residential and small business consumers.
The initiatives include:
- Establish and resource a cross-sector energy hardship group, which will include relevant policy work to ensure initiatives are well-considered and coordinated.
- Measure and track energy hardship in New Zealand by defining energy hardship and ways of identifying it.
- Progress a network of support services that provides energy efficiency fund to fund equipment and devices for community-level services that help people in energy hardship.
- Establish and operate a new electricity Consumer Advocacy Council and secretariat to give households and small businesses a voice.
Future opportunities for involvement
We welcome any thoughts or questions from iwi and hapū about this area of work, and any interest you might have to be involved.
There is also research that discusses interests and impact for Māori in the electricity and energy spaces.
Beehive release: More initiatives to reduce energy hardships(external link)
Electricity Price Review final report [PDF, 854 KB]
Impacts and opportunities for Māori analysis [PDF 2.5 MB](external link)– Ministry for the Environment website
Contact us
Our work with decommissioning
We are undertaking a programme of work to manage the liability associated with petroleum infrastructure decommissioning. These are changes that may be of interest to iwi and hapū.
Strengthening the legal and financial obligations to decommission
Decommissioning involves taking infrastructure out of service, which may include removing the infrastructure, plugging and abandoning wells, and undertaking necessary site restoration activities, in a safe and environmentally responsible manner.
In June this year, Cabinet agreed to strengthen the financial and legal obligations for permit holders to decommission petroleum infrastructure. The cabinet paper setting out the full scope of the work can be found here:
Regulatory framework for decommissioning petroleum infrastructure [PDF, 798 KB] - Cabinet Paper
We are preparing a Bill for introduction next year, while also designing regulations.
This work is focussed on ensuring there is an obligation on permit holders to decommission, and that permit holders have sufficient funds to do so. Part of this considers what decommissioning involves, and what infrastructure must be decommissioned. These regulations will not set the environmental standards for decommissioning, but they will be designed to complement regulations being developed by the Ministry for the Environment under the Exclusive Economic Zone (EEZ) Act. The EEZ is responsible for managing the environmental effects of activities beyond the territorial sea.
Orphan Wells
The changes we are working on are designed to reduce the risk of permit holders failing to fulfil their obligations to decommission infrastructure in future. However, we recognise there are already some wells without a current permit holder that have not been properly plugged and abandoned (orphan wells). We welcome views on how to address issues around these.
Liability post-decommissioning
There are concerns around the ongoing monitoring and maintenance of wells. ERM is looking to understand where the risk and/or cost for monitoring and rehabilitation post-decommissioning currently lies and we are interested in views on which parties might be best-placed to manage this.
Decommissioning work and iwi/hapū interests
We know iwi and hapū may have an interest in the regulations or on broader issues around managing liability, and would welcome any further feedback. If you would like to discuss this work more, email Resource.Markets.Policy@mbie.govt.nz.